Acquisition Deal Analyzer
Test any small-business deal: DSCR, cash-on-cash return, and the most you can pay with SBA and seller financing.
Example scenario—not a forecast or verified benchmark. Enable JavaScript to edit inputs, view charts, save locally and export your analysis.
Example inputs
- Purchase price
- 1,500,000
- Seller's discretionary earnings (SDE)
- 450,000
- Annual revenue
- 2,400,000
- Salary you (or a GM) will draw
- 100,000
- Annual maintenance capex
- 25,000
- Buyer equity (down payment)
- 10
- Seller note (% of price)
- 10
- Senior / SBA loan rate
- 10.5
- Senior loan term
- 10
- Seller note rate
- 7
- Seller note term
- 5
- Closing costs and fees
- 60,000
- Working capital you must fund
- 75,000
- Minimum DSCR your lender requires
- 1.25
Example results
At $1.5M (3.33x SDE), this deal is financeable: DSCR 1.41x, 33% cash-on-cash, and a maximum supportable price of $1.7M.
- Debt service coverage (DSCR)
- 1.41x
- Cash-on-cash return
- 33.4%
- Max price at 1.25x DSCR
- $1,696,032
- Price / SDE
- 3.33x
- Annual debt service
- $229,949
- Free cash after debt and salary
- $95,051
- Cash needed at close
- $285,000
- Your annual take (salary + free cash)
- $195,051
- Equity payback
- 36 mo
What stands out
DSCR of 1.41x clears the 1.25x hurdle
You keep $95K a year after debt service and your salary.
You could pay up to $1.7M at 1.25x
That is $196K of headroom over the asking price. Use it as negotiating room, not a target.
Seller note adds $36K/yr of payments
Asking for 24 months of standby (no payments) on the note can lift early DSCR materially; some SBA structures require it.
Cash-on-cash return of 33%
Your $285K of cash at close pays back in about 3 years.
Next actions
- Anchor your LOI below $1.7M; your headroom is your diligence buffer, not extra budget.
- Rebuild SDE from tax returns and bank statements before signing the LOI. Every $10K of SDE you lose in diligence cuts your max price by roughly the multiple you are paying.
- Negotiate the seller note onto full standby for the first 24 months to protect early cash flow.
- Stress-test the deal at SDE down 15%: if DSCR falls below 1.0x, hold back cash reserves or restructure before closing.
Model assumptions & limitations
- Cash available for debt service = SDE minus your $100,000 salary and $25,000 maintenance capex.
- Loans are fully amortizing with monthly payments; the seller note is paid concurrently (no standby).
- Lender DSCR minimum of 1.25x is an input; requirements vary by lender and loan program.
- Taxes, SBA guarantee fees financed into the loan, and working-capital lines are not modeled.